Grab Holdings, a Singapore-based provider of mobility, delivery, and digital financial services, has had its ‘BB-‘ long-term issuer credit rating affirmed by S&P Global Ratings following a $1.5b convertible bond issuance. Despite an expected spike in leverage, S&P maintains a stable outlook for Grab, projecting improved earnings and cash flow over the next 12 to 24 months.
The bond issuance is anticipated to increase Grab’s debt-to-EBITDA ratio to 5.3x in 2025, up from previous expectations of 1.0x-1.5x. However, S&P expects this ratio to decline to 3.6x in 2026 and 3.0x in 2027, supported by a nearly 30% compounded annual growth rate in EBITDA. This growth is attributed to enhanced performance in Grab’s ride-hailing, food delivery, and digital financial services segments.
S&P highlights that Grab’s substantial liquidity, with more than $7b in cash and short-term investments projected through 2026, provides a buffer against operational volatility. The company’s prudent risk management has ensured a minimum of $4.9b in cash holdings since 2021.
The use of bond proceeds will be crucial in assessing Grab’s creditworthiness. S&P notes that if the funds are directed towards large-scale acquisitions or investments, a reassessment of Grab’s business competitiveness may be necessary. However, Grab’s history of measured acquisitions, such as its 2018 takeover of Uber’s Southeast Asia business, suggests a cautious approach.
S&P warns that the rating could be lowered if Grab fails to sustain positive EBITDA or if its liquidity weakens due to increased competition or aggressive market tactics. Conversely, an improvement in the rating could occur if Grab maintains positive financial metrics and strengthens its operational scale.
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